ISOM2700: Homework Assignment \#3 Problem 4 [15 pts] Consider a retailer who plans to expand his business in a new city. There are two strategies: (1) He can choose to build a flagship store to serve the entire city; or (2) he can build 2 regional branch stores, each serving its own region. Weekly demand in region 1 is normally distributed with mean 2,000 and standard deviation 400. Weekly demand in region 2 is normally distributed with mean 800 and standard deviation 100 . The lead time for both regions is 2 weeks. Assume a target service level of 0.95 . (a) How much safety stock will the retailer have to hold if he builds 2 regional stores? [10 pt] (b) How does the safety stock requirement change if the retailer uses a central flagship store? [5 pt]